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ENERGY

German firm criticised for keeping Danish power from energy market

A German company reportedly put the brakes on export of energy by Denmark for a number of years, prompting a review by European Commissioner for Competition Margrethe Vestager.

German firm criticised for keeping Danish power from energy market
File photo: Mathias Løvgreen Bojesen/Scanpix 2017

The case touches on EU principles on creating an equal internal market for energy, newspaper Jyllands-Posten reports.

Danish industry representatives say they hope Vestager’s commission will use the case to highlight EU free market principles, including for energy.

“This is equivalent to someone in Germany preventing export of bacon or Lego from Denmark. That’s not allowed either,” Carsten Chachah, special consultant with interest organisation Dansk Energi, told Jyllands-Posten.

“Denmark is good at producing green energy and establishing it. But that requires a functional market,” Chachah added.

The issue relates specifically to German transmissions company TenneT, which has since 2011 regularly provided reduced capacity than was available for electricity transmission between Jutland and Germany.

Capacity was in some instances reduced to as little as five percent of potential, according to the report.

That has resulted in losses of up to 500 million Danish kroner (67 million euros) annually for Nordic energy producers, Dansk Energi said.

A formal inquiry into the issue was initiated by Vestager in March.

The European Commissioner, a Danish politician, said at the time that it was “crucial that electricity connections remain open for cross-border trade”.

Negotiations over the electricity market are currently ongoing between EU countries.

Danish Minister for the Environment Lars Christian Lilleholt told Jyllands-Posten in an email that “Denmark supports the application of the principle of free movement of goods to electricity trade.”

A spokesperson for TenneT noted in an email the company temporarily offered a minimum-capacity connection and is currently awaiting an outcome in the inquiry.

READ ALSO: Denmark set wind power record in 2017: ministry 

ENERGY

Danish businesses and households share burden of high energy bills

Businesses and households alike face soaring energy bills in Denmark in 2021.

Lower-than-expected wind levels are among factors causing a combination of low supply and high demand for energy.
Lower-than-expected wind levels are among factors causing a combination of low supply and high demand for energy. Photo: Thomas Lekfeldt/Ritzau Scanpix

New calculations from interest organisation Dansk Industri Energi show that industry is expected to pay 18 billion kroner for energy this year.

That is double the 9.5-billion kroner bill incurred in 2019, the last year to be unaffected by the Covid-19 pandemic.

“It’s certain that this is being felt by businesses out there,” said sector director with Dansk Industri Energi, Troels Ranis.

A number of factors are behind escalating energy prices, which are impacting businesses and households alike.

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These include global economic growth following the end of the first wave of coronavirus lockdowns.

That has resulted in increased industrial activity and thereby high demand for energy.

This high demand has coincided with less wind and lower rainfall in Norway producing less sustainable energy; and a relatively constant supply of gas from Russia.

“The basic principle of economics is being manifested. A large demand and low supply gives high prices,” Ranis said.

High energy costs incurred by businesses are likely to be passed to customers, the sector director predicted.

“Prices go up. That’s the short of it. And that’s how it has to be when energy prices increase because this makes it more expensive to produce,” he said.

“And that is passed on to the price of products,” he added.

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